17 July Budget Council

Date: 23/07/1998

EU TREASURY officials and a delegation from the European Parliament successfully negotiated a draft agreement setting out rules governing the European Commission's discretionary spending powers. The agreement, which will be finalised before the end of the year, is intended to prevent a recurrence of June's budget crisis. The Commission was forced to suspend much of its assistance to non-governmental organisations (NGOs) following a European Court of Justice decision that all payments from the EU purse had to be approved by national governments.

UNDER the agreement, the Commission will be entitled in future to finance experimental pilot schemes without governmental approval, but only if they do not last more than two years. In addition, expenditure incurred in this way must not exceed a total of 32 million ecu per year. The Commission will also be able to fund preparatory measures designed to test the feasibility of possible future programmes, to a maximum value of 30 million ecu per year. These measures may not last for more than three years, and their total cost may not exceed 75 million ecu in total. But the Commission reserves the right to exceed the annual ceiling of 30 million euro in “exceptional circumstances”. Finally, the new agreement authorises the Commission to spend money on “actions resulting from its prerogatives at institutional level”.

A LARGE part of the meeting was taken up with talks on how to overcome the immediate NGO funding crisis. National officials agreed to unblock funding for programmes which the Commission had proposed, but were awaiting formal approval. These fell into four key areas: measures to combat violence against children, action relating to illegal and harmful content on the Internet, support for electoral processes in developing countries, and human rights programmes in non-EU countries.

BUDGET Commissioner Erkki Liikanen said he would unblock funding for programmes yet to be proposed, providing a contract was signed between the Commission and the NGO concerned before 10 June 1998, the date the institution announced it was suspending its financial support following the ECJ ruling. For the rest, he said “it would be possible to consider” honouring existing financial commitments.

LIIKANEN and the national representatives agreed that, once the Amsterdam Treaty came into force, it would also be possible to approve measures to combat social exclusion. These account for a high proportion of the programmes threatened by the budget crisis.

NATIONAL treasury officials discussed the EU's draft budget for 1999, based on Commission proposals and preparatory work by the Parliament's budget committee and Brussels-based national representatives. The draft budget comprises 96.9 billion ecu in commitment appropriations and 86.5 billion ecu in payment appropriations. The total payment appropriations represent 1.10&percent; of the EU's aggregate gross national product, and a 2.87&percent; increase on the figure agreed for 1998.

FINALLY, national officials approved a Commission plan to boost the EU's emergency aid reserve for 1998 by 100 million ecu, in recognition of the many humanitarian crises which will require further intervention before the end of the year.